Figures are not always what they seem

WORLDWIDE: Some experiences in life have made me cautious about claims relating to machinery performance and efficiency implying favourable, rather static standardised operational circumstances as opposed to the unpredictable dynamic conditions that prevail in the real world.

When I bought a new motorbike years ago, the manual suggested an average fuel consumption of 5 litres per 100 kilometres (l/km), an appealing figure supported by German DIN industry standards that are world-renowned for reliability and accuracy. However, the best I achieved was an average of 6.5l/100km - and only when riding at a very steady pace. When using the bike's full capabilities, it was not difficult to burn a third more fuel than the official figures indicated.

Being unfamiliar with standardised driving cycles, I felt cheated but never considered taking legal action against the manufacturer, as a Los Angeles resident recently did. The woman is reported to have been awarded nearly $10,000 in damages against Honda in a dispute over her Civic Hybrid vehicle's much higher-than-promised fuel consumption. It remains to be seen whether this case will help stop a common automotive industry practice that is claimed to involve cars and engines specially prepared to achieve favourable results.

A key wind industry focus is the need substantially to bring down peak offshore investment costs and lifecycle-based costs of energy (CoE= EUR/kWh/20-25 years). This was one of the main topics at the Hamburg offshore wind conference 2012, organised by GL Garrad Hassan.

Alternatively, parties could decide to concentrate on one key area only. A conference participant told me of an ambitious wind-industry entrant that is developing a "radical" new offshore turbine that aims to cut CoE by 40-50% compared with conventional current designs.

Such optimism might be fuelled in part by the often-expressed view that turbines truly designed for offshore use do not yet exist and simply picking the right technologies will automatically produce superior solutions.

Another mistaken perception I often hear is that instantly improving on existing conventional technology to lower CoE significantly cannot be that difficult.

Such claims ignore the fact that all new technologies/product developments have to pass a learning curve, making it virtually impossible to jump instantly from prototype stage to series product. During the initial stages, when design-related and other issues have to be sorted out and simultaneously track record experience is being built, both costs and risks are at their highest.

Challenges of innovation

Aiming for radical innovation and fast-track product development further implies the incorporation of major technology leaps, each of which further adds to cumulative risks, uncertainties and costs. Established wind industry players and new entrants alike face comparable environmental and operating conditions, and at least in theory have equal opportunities to benefit from new advances in science and technology.

Repower is an established offshore pioneer with evolutionary technology development as a main strategy. At the Hamburg event, vice-president of business development offshore, Axel Birk, showed CoE peak values averaging around EUR170/MWh for current wind plants in European waters. The aim is to cut this to EUR120/MWh by 2020, which will require a series of interlinked measures including dedicated installation vessels, lower overall investment costs and more efficient turbines. Assuming unchanged investment costs, Birk said increasing rotor diameter from 120 to 150 metres would yield 15 to 18% extra energy. He also said raising power rating from 6 to 8MW would bring an additional annual yield of around 15%. Combining both measures is a third option.

Introducing innovative offshore turbine designs in the current climate, alongside a high-cost wind market, poses major challenges. Market entrants face an even tougher task of building a track record with (unproven) technology as well as convincing risk-averse developers, banks and insurers of the value of their offerings.

In Hamburg a financial expert confirmed to me that such challenges also exist for large suppliers with a sound track record but who have changed drive system technology. During a following panel discussion one panellist suggested building a limited number of projects each year involving unproven technology. This might not be a bad idea as it would encourage developers to pursue innovation and could provide the right environment for curbing long-term financial and other major risks.

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